Essar Steel’s fate may get sealed today as the NCLT is expected to give its verdict in the high-profile insolvency and bankruptcy case with heavyweights ArcelorMittal and original promoters Ruia family fighting it out for assets worth over Rs 50,000 crore at stake.
The National Company Law Tribunal (Ahmedabad) is expected to give its ruling on the resolution plan involving a Rs 42,000-crore bid by Lakshmi Niwas Mittal’s ArcelorMittal. The Committee of Creditors (CoC) in the Essar Steel IBC case had earlier voted in favour of ArcelorMittal’s bid before Ruias made their Rs 54,000 crore bid for the control of the company.
The NCLT (Ahmedabad) has already rejected the plea of Ruia family, who sought to take back the control of Essar Steel with their bid topping that of ArcelorMittal’s. NCLT had struck down Ruias’ ‘last minute’ entry into the process.
Meanwhile, the Supreme Court has also today cleared the decks for the NCLT verdict in the Essar Steel IBC case by rejecting the plea of a few operational creditors, who had moved the apex court seeking a hearing before the NCLT verdict is out. Operational Creditors had moved Supreme Court requesting a jury for their case citing principles of natural justice.
Essar Steel is one of the 12 large cases to be admitted early-on under India’s newly-formed Insolvency and Bankruptcy Code. The company had declared bankruptcy in 2015 after failing to repay debts worth about Rs 54,000 crore, and facing allegations of fraud. The company, which was promoted by the Ruia family, got involved in insolvency proceedings in August of 2017. Several bidders tried to gain control of the debt-ridden company including ArcelorMittal, Vedanta Group, JSW Steel Ltd and Numetal, however, ArcelorMittal emerged the winner with the highest bid after several rounds of bidding.
However, even after ArcelorMittal’s winning bid getting approved by the CoC, the resolution of the case has taken many twists and turns, with the original promoters — Ruias, and several operational creditors making claims and raising objections at various judicial platforms against going ahead with the ArcelorMittal bid.
Operational Creditors fear that the ArcelorMittal’s resolution plan would not leave much for them to recover their dues from the company. Meanwhile, Ruias are making attempts to buy the company back by offering to pay all creditors, including operational creditors.
Source: Financial Express, February 11, 2019